The IRS has a message for people who are still waiting for federal stimulus payments: the money is already out the door.
The tax agency said this week that it sent over 160 million checks – $ 1,200 for adults and $ 500 for children – directed by the Aid, Aid and Economic Security Act (CARES), which represented the first round of stimulus payments. sent to most US Families. As of December, it has also sent more than 147 million payments for the second round of checks, which offered $ 600 for each eligible adult and child.
To be sure, Congress is currently negotiating another round of stimulus aid, which can target a third check for eligible families. If this $ 1.9 billion aid effort is approved by lawmakers, it could be made law by President Joe Biden by the end of March, Wall Street analysts say. In that case, the IRS would be allowed to distribute a third round of checks. So far, the tax agency has been authorized to send two rounds of checks – and said that all payments were sent by mail or deposited in bank accounts.
In all, the IRS has disbursed more than $ 410 billion in so-called Economic Impact Payments, emergency relief to help balance people during the pandemic, for US families since April. However, while these checks were delivered to most qualified individuals, the IRS has struggled to reach some of the most financially vulnerable Americans, such as those who do not have bank accounts or who do not earn enough money to file tax returns.
These issues have complicated the distribution of stimulus checks because the IRS is relying on a person’s most recent tax return to determine whether they are entitled to payments, as well as to determine where to send the money.
“That was a big problem – those people who qualified but didn’t make a return,” and therefore are not on the IRS’s radar, said Jody D’Agostini, a certified financial planner with Equitable Advisors. Some of the people left out are probably the ones who most need the stimulus money, she added.
Although the IRS said that all checks were issued, he added that some checks may still be in the mail. And if you haven’t received one or both of the stimulus payments – or haven’t received the correct amount – you’ll have another chance to claim the money when you complete your 2020 income tax return, according to the agency.
“If individuals have not received a payment – or if they have not received the full amounts – they may be eligible to claim recovery rebate credit and must file a 2020 tax return,” the tax agency said in a statement.
This could happen if someone’s income fell in 2020, according to the experience of millions of Americans who were on leave or lost their jobs last year. “Some people did not qualify in their 2018 and 2019 tax returns, but they had a terrible 2020 and did not receive the check, but they were really eligible,” said D’Agostini. These people can claim payment by filing a 2020 income tax return.
“Financial difficulties”
The IRS has been criticized by some critics because of its distribution of stimulus payments, with National Taxpayer Attorney Erin M. Collins calling the agency for not ensuring that checks reach all eligible people. Families that did not receive their checks “are probably experiencing financial difficulties now,” Collins wrote in a report to Congress last month.
In his opinion, taxpayers should not have to wait to submit their 2020 tax returns in early 2021 to receive their payments. Unfortunately for those left out, the IRS is not offering another option yet. He said people who missed a payment or did not receive the correct amount will have to wait until they submit their 2020 tax returns to claim the extra money.
How to claim your stimulus money
The first step is to find out how much missing stimulus payments you will need to claim on your 2020 tax returns.
The IRS, which began accepting tax returns on February 12, calls checks “recovery discount credits” on its tax forms. That’s because, technically, the payments were actually tax breaks paid before filing your taxes.
To help determine whether you owe more, the IRS has published a recovery discount credit spreadsheet, which asks questions about eligibility (such as your income) and how much you have received on the two stimulus checks so far. If you think you have more debt, you can enter the amount on line 30 of IRS Form 1040.
If you don’t remember how much you received in the first two rounds of stimulus payments, you can create or view your account on the IRS website. The extra stimulus money will be included in your tax refund. Most taxpayers will receive refunds within 21 days, according to the tax agency.
With Congress now working on a third relief package, millions of families could receive a third stimulus check in the coming weeks, which takes place in the middle of the tax reporting season.
People who lost income in 2020 or who had a baby last year may want to file your taxes as soon as possible to ensure that they receive the correct amount on their next stimulus check. Otherwise, the IRS could rely on its 2019 tax returns to determine eligibility.
If that happens, people may have another wait ahead of them until they can update their information with the IRS and claim the extra stimulus money.